Can I outperform AirDNA and Rabbu Data with unique property and amenities???

[Melissa Thomas]

I recently purchased a unique home - an A-Frame in northern Wisconsin at the end of December. I have been working through major renovations such as a new roof, a fully gutted bathroom with higher end finishes, and lots of new amenities that my competition does not have.

I hope the additional sweat equity and improvements will increase the property value; however, since doing all of the comps in November AirDNA and Rabbu look much different and much lower for comps. There are more properties being listed focusing on big groups and beds and heads, whereas my strategy is focusing on a more unique stay and experience, I have higher-end amenities and upgrades, focusing on smaller groups of 8 max, and also offering a menu of concierge services.

The comps now have me worried, the AirDNA and Rabbu data. What I am wondering is if anyone else is offering unique options like this and seeing a positive difference in your performance vs. AirDNA and Rabbu Comps? Any feedback is appreciated!

[John Underwood]

First I don't trust these comps because they can't drill down to specific comps to make sure they are your true competition. 

So yes if you have a great property that has a great location, views and amenities then you should absolutely be able to do better than these estimates.

[Ryan Moyer]

Absolutely.  Doing things to stand out is definitely the way to go right now.  There was a time during the revenge travel boom where getting an average listing and spending the least out of pocket was a decent way to maximize revenue.  Now it's the opposite, as there is a huge oversupply of average listings and you really need to stand out in terms of amenities and the property itself.

Of course, as more and more people realize that (as many many already have) what was once "stand out" will become "average", and be less advantageous.  We're seeing this a lot in the Disney area where a "regular" home used to be average and a mid-tier themed home was "stand out".  Now I would say a mid tier theme home is "average" and to standout you have to have really over the top theming (which is becoming more and more average by the day).  

[Rafael Loza]

YES! 100%. I used Airdna and Rabbu as a very base rate for where I can start. I always outperform it based on the service we provide and the client we look for.

[Melissa Thomas]

Thank you!!

[Melissa Thomas]

Quote from @Ryan Moyer:

Absolutely.  Doing things to stand out is definitely the way to go right now.  There was a time during the revenge travel boom where getting an average listing and spending the least out of pocket was a decent way to maximize revenue.  Now it's the opposite, as there is a huge oversupply of average listings and you really need to stand out in terms of amenities and the property itself.

Of course, as more and more people realize that (as many many already have) what was once "stand out" will become "average", and be less advantageous.  We're seeing this a lot in the Disney area where a "regular" home used to be average and a mid-tier themed home was "stand out".  Now I would say a mid tier theme home is "average" and to standout you have to have really over the top theming (which is becoming more and more average by the day).  

 Thank you! Yes I see that, I think my market is still catching up and everyone is still in that very basic set up. I see myself as shaking it up a bit, and hoping the market demand will be there for my offering. Thanks for the perspecitve, I have not heard of the revenge boom!

[Melissa Thomas]

Quote from @John Underwood:

First I don't trust these comps because they can't drill down to specific comps to make sure they are your true competition. 

So yes if you have a great property that has a great location, views and amenities then you should absolutely be able to do better than these estimates.

Thankyou for that feedback!

[Sarah Kensinger]

You're on the best track for a STR host and operator! Don't forget to always give guests an experience with great service and a clean home, they'll keep coming and tell their family and friends. Airdna and Rabbu is a guide, not the final numbers. My goal is to always outperform them, and with the thought process you seem to have I'm sure you can too!

[Leslie Anne Morris]

Definitely consider other options besides just AirDNA.  Get local market experience from other investors and agents or property managers. Plus, just by listing yours and gauging interest you will see what it can truly make. If it's a premium product and it stands out and starts booking fast - then you are priced too low.

[Brian Barch]

of course, there's a reason it's just an average.  I'm 15-20 basis pts better than average in my market

[Michael Baum]

Hey @Melissa Thomas, sounds like a cool place!

I agree with everyone on making it nice as a standout.

Have you looked at all the other listings nearby on AirBNB and VRBO to compare how you will look? What is their nightly rates? What kind of amenities are you talking about? What are others offering?

AirDNA and Rabbu are algorithms so they are basing their info off what is in the area. That can get skewed. For example, I am not meeting AirDNA's nightly rate. That was because we were lumped in with some large log mansions on the lake.

Our lake house is nice, but not 13k sqft and 4k a night. AirDNA priced us at $1250 a night. That is way over what we charge and what I felt, based on comps, we should rent for. 

[Melissa Thomas]

Quote from @Michael Baum:

Hey @Melissa Thomas, sounds like a cool place!

I agree with everyone on making it nice as a standout.

Have you looked at all the other listings nearby on AirBNB and VRBO to compare how you will look? What is their nightly rates? What kind of amenities are you talking about? What are others offering?

AirDNA and Rabbu are algorithms so they are basing their info off what is in the area. That can get skewed. For example, I am not meeting AirDNA's nightly rate. That was because we were lumped in with some large log mansions on the lake.

Our lake house is nice, but not 13k sqft and 4k a night. AirDNA priced us at $1250 a night. That is way over what we charge and what I felt, based on comps, we should rent for. 

 I have looked at the nearby listings, and think while we are not luxury or a huge cabin, a unique higher-end stay perhaps, offering EV charger, hot tub, and more modern finishes, other nightly rates seem higher than Airdna for sure. My market is still very much your standard cabin with beds everywhere. I also think it might be skewed due to a few very new properties coming in at a lower nightly rate in the last couple of months, likely to get bookings... I am trying to be realistic about ADR etc. Hoping to be up and running in less than 4 weeks, hoping we perform well!

[Michael Baum]

Hey @Melissa Thomas, well, I agree with some of your ideas. EV chargers are something you could offer. Not sure how that will add to your bottom line seeing as just about 3% of the cars on the road are EVs.

Before adding a hot tub, make sure you have the infrastructure (cleaners) in the area to support it. Hot tubs needs to have the water swapped per guest (from what I have read here on BP).

With the local market being more basic cabins, I wouldn't go nuts on finishes. Too overboard can possibly turn off some guests. They might think it is too fancy for them and stay where they usually stay. You will have to find a nice balance. Something nicer than average but not over the top.

[Eliott Elias]

You can, but don’t be too optimistic about it. Expect to make those airDNA numbers.

[Melissa Thomas]

Quote from @Michael Baum:

Hey @Melissa Thomas, well, I agree with some of your ideas. EV chargers are something you could offer. Not sure how that will add to your bottom line seeing as just about 3% of the cars on the road are EVs.

Before adding a hot tub, make sure you have the infrastructure (cleaners) in the area to support it. Hot tubs needs to have the water swapped per guest (from what I have read here on BP).

With the local market being more basic cabins, I wouldn't go nuts on finishes. Too overboard can possibly turn off some guests. They might think it is too fancy for them and stay where they usually stay. You will have to find a nice balance. Something nicer than average but not over the top.

Thanks! The place came with a basic hot tub thankfully and no extra out of pocket for me there, and I have worked out details with my cleaner already so we are all set there thankfully! Agreed, its, not anything luxe as I mentioned but better. We do get a lot of traffic from larger cities, mainly Chicago so hoping to appeal to some of that crowd with the EVs (not that all of Chicago has EV's or anything not making assumptions) but we get a good pull from larger cities

[Blake Novotney]

I have a lot of clients who outperform the AirDNA estimates, I think it really comes down to your local market. Mine is a large vacation and second-home market, so lots of mom-and-pop run STR's that are outdated and questionably run. If that is the "average" you're up against, then yes absolutely. However, I wouldn't get too optimistic when crunching numbers and taking on too much risk.

[Jay Thomas]

However, if you're not in an ideal location or have fewer amenities than your competition it might be difficult to do better than the comps. That's why it is so important to research the local real estate market and get a detailed understanding of what homes like yours are selling for. Understanding the local dynamics can help you make sure you are pricing your property correctly and maximize your return on investment.

[William Beck]

I think you'll always be at the somewhat mercy of the areas seasonality. Not sure how many people are heading to northern Wisconsin in mid winter. However, if you have the coolest A-frame within a few hundred miles, people will notice! Plus if your property is so different than the local comps, are those comps worth factoring with your property's revenue estimates?

[Andres Murillo]

1000%. You are now in the hospitality business. If comps look like motels but your property looks like a 5-star hotel - you'll earn MUCH more. Investors often overlook attention to detail on furnishings and amenities - to their peril. Kudos to you for putting more effort, energy, and capital towards your stay, I'm sure you'll be happy you did. 

[Andrew Steffens]

I think everyone agrees here you def can! We often beat AirDNA for our clients by not only providing a superior product but also listing on 14+ sites (and direct booking marketing) as well as using good pricing software.  Best of luck!

[Melissa Thomas]

Quote from @Andrew Steffens:

I think everyone agrees here you def can! We often beat AirDNA for our clients by not only providing a superior product but also listing on 14+ sites (and direct booking marketing) as well as using good pricing software.  Best of luck!

 Right agreed! I am also not leaning on OTAs alone and will be fully marketing my property (I am a marketing professional by trade) so I think that could help as well, vs throwing it up on an OTA and letting it sit.